NEW YORK, Nov 29 (Reuters) - U.S. stocks climbed on
Thursday, but shed some earlier gains, after John Boehner, the
top Republican in Congress, poured cold water on hopes that
lawmakers were getting closer to cutting a budget deal that
would avert a possible recession next year.

Boehner's comment - that no "substantive" progress had been
made in fiscal talks with the White House - was the latest in a
string of contrary pronouncements by policymakers that have
wobbled the markets as investors attempt to speculate over
whether Washington will finally cut a deal.

There have been some signs that leaders are moving closer to
a fiscal agreement. The S&P 500 has gained nearly 5 percent
after dropping almost 8 percent following the U.S. election in
November. But investors remain wary that ad hoc statements from
politicians can spark quick reversals in the market.

"When the sentiment is that nothing is going to get done, it
does create a lot of anxiety and selling pressure. If there's
any sense of progress, then the market seems to rally," said
Eric Kuby, chief investment officer at North Star Investment
Management in Chicago. "I think we're hostage to this for the
rest of the year."

Discussions are ongoing in Congress over avoiding big
spending cuts and tax hikes, known as the "fiscal cliff," that
will begin to take effect from January.

U.S.-listed shares of BlackBerry maker Research In Motion
surged 5.9 percent to $11.75 after Goldman Sachs
upgraded the stock to "buy" from "neutral" on optimistic ahead
of the launch of the BlackBerry 10 smartphone.

Shares of top retailers retreated in the wake of data
showing a weak start to November sales after superstorm Sandy.
Target fell 1.6 percent to $61.80 percent and Kohl's
Corp dropped 8.2 percent to $46.94.

The U.S. economy grew faster than initially thought in the
third quarter as businesses restocked, but consumer and business
spending were revised lower in a sobering reminder of the
economic recovery's underlying weakness.

Gross domestic product expanded at a 2.7 percent annual rate
in the quarter, the Commerce Department said, as export growth
helped offset the weakest consumer spending and first drop in
business investment in more than a year.

Contracts to buy previously owned U.S. homes rose more than
expected in October, a sign the housing market recovery advanced
into the fourth quarter despite a mammoth storm and concerns
over looming tax hikes.

Shares of companies that build homes rose. The PHLX housing
index rose 0.4 percent, shedding some earlier gains in
line with the pullback in the broader market.

Although domestic events largely dominated investors'
attention, the euro zone is still on the radar. The yield on
Italy's 10-year bonds fell to the lowest in two years at an
auction, amid relief that international lenders reached
agreement this week to reduce Greece's debt by more than 40
billion euros.

"The fact that the bond sales in Europe went well suggest
confidence is beginning to reenter some of the peripheral
nations and that is a good sign," said Peter Cardillo, chief
market economist at Rockwell Global Capital in New York.